U.S. Senator Tom Carper today called on the Commodity Futures Trading Commission to clarify if or how it would regulate the emerging virtual currency business.
“Given that we read about a new venture in the digital currency space nearly every day, it is important that our government agencies respond appropriately and in a timely manner with thoughtful policy and oversight,” Carper said in an e-mail. “Those willing to take risks and play by the rules should have the opportunity to thrive without the fog of uncertainty.”
Carper, a Delaware Democrat who heads the Homeland Security and Governmental Affairs Committee, initially became interested in Bitcoin, the most prominent virtual currency, after reports that it was used in illicit transactions even as it showed promise as a legitimate payment system. He subsequently held the first congressional hearing about the new technology, on Nov. 18.
Carper’s staff is now writing a report about virtual currencies, which will be released by the spring of this year, his spokeswoman, Jennie Westbrook, said in an e-mail.
Carper was responding to a letter from Gary Gensler, the former CFTC chairman, who answered a four-month-old request from Carper and Senator Tom Coburn, an Oklahoma Republican and ranking member of the homeland security panel, on how the CFTC would handle virtual currencies. Gensler wrote back on Dec. 27, a few days before he left the commission.
“While the commission does not have policies and procedures that are specific to virtual currencies, the agency’s regulatory authority extends to futures and swaps contracts in any commodity,” Gensler wrote.
He said the law “broadly defines the term commodity,” but didn’t lay out any plan to regulate virtual currencies or approve products based on them. Gensler also took note of the agency’s “broad enforcement powers” on commodities.
Bitcoin was introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto, and is the most prominent virtual currency to date. It has no central issuing authority, and uses a public ledger to verify transactions. The currency can be used to pay for a range of products and services, including t-shirts, food or an appointment with a Manhattan psychiatrist.